Sometimes a small survey can reveal a huge amount of information. Especially when it covers the aspect of a whole group of companies not using their own product. According to the London VC firm MMC Ventures, 40% of European AI companies, don’t use AI in the slightest.
The survey reveals that most companies only have “AI” in their name because of the generated interest. This is done only to capitalize on the hype and futuristic properties associated with artificial intelligence.
MMC did an in-depth examination of over 2800 startups who are presumably work with artificial intelligence. The results were questionable to say the least as it turned out that over 40% of the startups do not use any form of AI technology. Not a single one of these AI companies even invested in artificial intelligence or machine learning technology.
This phenomenon is understood more easily when we take into account the funding opportunities. According to the study, AI companies receive anywhere from 15% to 50% more funding than other startups. Every investor understands that AI technology will shape the world in the near future so it’s absolutely normal to invest in the prospect of it. This practice however, offers a very clear incentive to companies to deceive investors that their project is related to artificial intelligence in some way.
One of the biggest costs for actual AI companies is the payments to experts. Highly specialized AI engineers cost a fortune and with good reason. The field is relatively new and offers unlimited possibility so investors give in to the large funding demands.
The early 1990’s saw the first AI bubble burst. This resulted in a very negative stigma in the eyes of every respectable investor. There was no doubt that the concept was available to everyone, but the technological resources available to both developers and researchers simply was not sufficient.
AI companies were at one point, disliked by the majority of investors
For a long period of time, the term “Machine Learning” because a rather popular way to describe the same technology AI researches are working on today. The fiends were definitely not synonymous but many argued that they became so in order to distance developers from the negative stigma of AI projects. After all, for a while these projects required a colossal amount of funding and accomplished next to nothing.
Nowadays, those days are over and progress is happening. The crazy about artificial intelligence is back and with modern technology we can all get a feeling of the endless possibilities offered by artificial intelligence.
A similar phenomenon occurred last year when the ICO model lost all credibility after the endless amounts of scams. Many other rebranded models like IICOs, STOs and SAFTs all arose to combat the negative stigma.
In a way blockchain and AI technology are the same. They both have incredible potential and are largely unknown to the general public. This even includes the investors and business executives. Some companies who add “blockchain” to their name see their stock skyrocket in less than 1 day. This of course is a bad practice and leads to serious reputation damage for both industries.
Despite many AI companies not being tied to artificial intelligence in any way, the potential is still there. Investors know full well that in the near future, AI companies will change everything.
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